ETMarkets Smart Talk: Titan could scale new high & cross Rs 3,000 mark: Jatin Gohil

Following its impressive show in Q2 business update, Titan shares ended 5.2% higher on Friday and closed a tad below its lifetime closing high. “We believe the stock will surpass its lifetime high of Rs 2,768 and explore uncharted territory, which could take it towards Rs 3,000,” says Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities, in this interview with ETMarkets. Edited excerpts:

After the roller-coaster ride in the last few days, where is Nifty headed in the week ahead according to the charts?
Nifty has formed a bearish reversal pattern - Spinning Top - at around its 50% Fibonacci Retracement level of prior down move (18,096-16,748 levels) and later, resumed its southward journey. This could drag the index towards its psychological level of 17,000 initially and around its lowest level of September 2022 (16,750) subsequently. In case the index violates its lowest level of September 2022, the undergoing negative momentum will accelerate and push it towards the 100-week SMA, which was placed at around 16,200-level. In case of pullback, its 50% Fibonacci Retracement level of prior down move will cap the up-move, which is placed at around 17,430-level. However, a stable move above that Fibonacci Retracement level will invalidate probable decline in the index and may support an up-move towards 17,700-level.

Do you see the possibility of Nifty Bank scaling back towards the all-time high level?
Nifty Bank also witnessed an identical reversal after testing its 50% Fibonacci Retracement level of prior down move (41,840-37,386 levels) and breached its daily rising trend. There are very less chances of scaling back towards the lifetime high as the key technical indicators are neutral on the short-term timeframe chart, while its near-term indicators are negatively poised.

This could drag the index towards its 20-week EMA (37,900-level) initially and around its lowest level of September 2022 (37,400) subsequently. On the higher side, its 50% Fibonacci Retracement level of prior down move will cap the up move placed at around 39,600-level. However, a stable move above that Fibonacci Retracement level will negate possible fall in the index and may support a rise towards 40,000-level.

The stocks of two defence PSUs - Mazagon Dock and Cochin Shipyard - have been among the top gainers in BSE500 pack this week with double-digit gains. Is it time to book profits?
During the last week, midcaps and smallcaps outperformed the benchmark Nifty. For a couple of weeks, defence PSUs, especially ship building & allied service providers remained in focus with positive momentum and reported exponential rise in a very short span of time. Continuing its prior rising trend, Mazagon Dock recorded a new high and Cochin Shipyard rose to fresh 4-year high during this week with relatively higher volume. This signals that major market participants are in favor of bulls. As per the current set-up, we believe that undergoing positive momentum will continue, which will support further rise in these stocks. It’s time to trail the stop loss rather than booking profits.

IT stocks have been outperforming on the back of a depreciating rupee. Which stocks are looking strong on the charts?
We believe that midcap IT counters will provide better trading as well as investment opportunities at current juncture, as the midcap and smallcap space is in focus. The counters like Larsen & Toubro Infotech, MindTree and Coforge will remain in focus with positive momentum. These counters have the potential to test their recent swing highs, which may support 7-9% up move from the current juncture.

After Friday’s rally in Titan, what are the charts looking like for the week? Any targets that you have on the stock?
On Friday, Titan bounced after a gap-up opening and closed tad below its lifetime closing high. Spike in volume, rise in future open interest and increase in future premium signals that major market participants are in favor of bulls. We believe the stock will surpass its lifetime high of Rs 2,768 and explore uncharted territory, which could take it towards Rs 3,000.

Which are the 3-4 stocks that would be on top of your radar for the week?
Our main focus will be on midcap pharma, FMCG and IT stocks. In the pharma sector, Lupin and Aurobindo pharma, while in the FMCG space, United Spirits and United Breweries & in the IT sector, MindTree and Coforge will remain in focus with positive momentum.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)